Charlotte's Web Reports 38% Increase In B2B Revenue, Stock Slightly Down On Announcing Q2 2021 Results

Cannabis company, Charlotte's Web Holdings, Inc. CWEB CWBHF reported its financial results Thursday for the second quarter ended June 30, 2021, posting a 38% year-over-year spike in consolidated business-to-business (B2B) revenue, driven mainly by a return to brick and mortar retail shopping. Shares traded 4.20% lower at $3.19 per share at the time of writing Thursday morning.

Deanie Elsner, the company's CEO, believes that Charlotte's Web is "best positioned to take advantage of the return to brick and mortar retail as we hold the number one share position in the food/drug/mass and natural specialty retail channels in the US."

Q2 2021 Financial Highlights

  • Revenue rose by 11.4% year-over-year to $24.2 million.
  • DTC eCommerce revenue went up by 1 % to $15.7 million, accounting for 64.9% of the revenue and holding onto the pandemic online shopping boost.
  • Gross profit increased to $15.8 million, or 65.5% of consolidated revenue
  • Operating expenses reduced by 15.2% year-over-year.
  • Adjusted EBITDA came in negative at $3.9 million, representing an improvement compared to the prior year's $5.7 million loss and the prior quarter's $4.7 million loss.
  • The company had $27.1 million cash (plus $10.9 million pending IRS tax receivable) and $90.1 million working capital at the quarter-end.
  • Total assets amounted to $286 million.
  • $6.5 million of cash in operations used during the quarter compared to $7.1 million of cash used in operations during the second quarter of 2020.
  • $10 million unused line of credit with JPMorgan and opportunity to extend to $20 million.

Business Highlights

Over the quarter, the Denver-based company planted the first crop of patented hemp cultivars approved by Health Canada in the Okanagan Valley in British Columbia, Canada.

Elsner expects initial product sales by early 2022.

In addition, the company also invested $1.6 million in capital expenditures related to substantially completing phase III expansion of a new 137,000 square foot facility with extraction infrastructure and research and development expansion.

"A lot of our focus in 2021 and 2022 will be evolving our footprint and expanding our presence across the country or across the globe. We're entering a number of new countries," Elsner recently told Benzinga.

Commenting on the fact that consumers are coming via CBD but quickly transitioning to cannabis, Elsner said that Charlotte's Web is in a "position to be the bridge between CBD and cannabis wellness, and that category expands our total available market by three to four times."

Photo: Courtesy of CRYSTALWEED cannabis on Unsplash

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Posted In: CannabisEarningsNewsPenny StocksSmall CapMarketsCBDDeanie Elsnersecond quarter earnings
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